NPS and UPS: The central government has launched a new pension scheme, the Unified Pension Scheme (UPS), under which central government employees will receive a guaranteed pension amount after retirement by contributing 10% of their basic pay and DA. Employers will also contribute 18.5% of the basic pay and DA to the UPS.
The Finance Ministry on Friday said the government has approved the National Pension System (NPS) and the Integrated Pension Scheme (UPSThe government has approved the extension of two investment options, Life Cycle and Balanced Life Cycle, for central government employees under the scheme.
There was a constant demand for such
This is in line with the continued demand from central government employees for a wider range of investment options available to non-government investors, according to PTI. The Finance Ministry said these options are designed to enhance flexibility in retirement planning and allow employees to manage their retirement funds according to personal preferences.
Increased options under NPS and UPS
Under NPS and UPS, central government employees can now choose from multiple investment options – the default option being the ‘default pattern’ of investment as defined by the Pension Fund Regulatory and Development Authority (PFRDA) from time to time.
There is a separate option for those with low risk.
The second option is Scheme G, which invests 100 percent in government securities for low-risk, assured returns. Under the Life Cycle (LC-25) option, the maximum equity allocation is 25 percent, which gradually decreases from age 35 to 55, while LC-50 limits the maximum equity allocation to 50 percent of the retirement corpus.
Know the benefits
The Balanced Life Cycle (BLC) option is a modified version of the LC-50, in which the equity allocation reduces from age 45, allowing employees to remain invested in equities for a longer period if they wish. In the LC75, the maximum equity allocation is 75 percent, gradually decreasing from age 35 to 55.
What is NPS?
NPS stands for National Pension System, a defined contribution pension scheme launched by the Government of India. It is an efficient way to save for retirement and receive regular income after retirement. The scheme is regulated by the Pension Fund Regulatory and Development Authority (PFRDA).
What is UPS?
The central government has launched a new pension scheme, the Unified Pension Scheme (UPS), under which central government employees will receive a guaranteed pension amount after retirement by contributing 10% of their basic pay and DA. Employers will also contribute 18.5% of the basic pay and DA towards the UPS.
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